Share Plc, parent company of retail stockbroker The Share Centre, issued a trading update for the year to December 31st 2010. Share reported that it is likely to exceed market expectations for operating profit, PBT and EPS. The latest Edison Investment Research report on share estimates revenues at £15 million, operating profit of £2.6 million, PBT of £2.9 million and EPS of 1.52p (PBT and EPS exclude amortisation of intangibles and exceptionals).
The outperformance is based on the rising equity markets (the FTSE appreciated by 20% over the period), which helped drive fee revenue. Dealing volumes have stayed strong toward the end of the year - which is not customarily the case, boosting dealing commission. Healthy market share gains have also contributed to the result.
In order to help address the decline in interest revenue on its deposits from the expiration of its interest rate hedging policy on November 1st, Share Plc announced that it has entered into an arrangement with a building society to which Share will loan its deposits at 2.5% over the base rate, which the company reports is a significant improvement over the rates for similar term deposits available to the group from the major banks.
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